If this is your first visit, be sure to
check out the FAQ by clicking the
link above. You may have to register
before you can post: click the register link above to proceed. To start viewing messages,
select the forum that you want to visit from the selection below.

The US Dollar is trading higher this morning as traders await a speech by Federal Reserve Chairwoman later this afternoon. As always, Janet Yellen’s presentation will be closely scrutinized by the market participants, who will look for clues regarding the Fed’s future monetary policy.

On the March 16, the FOMC delivered a statement, which gave a dovish message to the markets as it reduced the projected amount of interest rate increases for 2016. This action will likely lead to a lower dollar and expected to boost the US economy.

The shift towards a policy that seeks to devalue the US currency was highlighted by FOMC Chairwoman’s message to the worlds gathered press that US Dollar strength transitory. Although this term was used this was the first time it was applied in regards to the Dollar’s value.

The main goals of the policymakers are the price stability and a healthy US job market. Nevertheless, a weaker US Dollar policy is welcomed by the global markets as this could lead to price stability and less deflation there too. Furthermore, the policy of deliberately weakening the US Dollar could act as a spur for growth both within the USA and across the globe..

EURUSD has bounced off the bottom of the daily uptrend channel as investors hopes regarding the US rate hikes are fading after the yesterday’s speech of Janet Yellen.

EURUSD needs to hold above 1.1253 level being the intraday Pivot Point if the price action is to continue the upward move.

The initial upside target is 1.1370, which is the Daily Average True Range (ATR) upside projection of today. Should this mark be reached successfully, a further extension to 1.1430, could be observed further.

If EURUSD fails to maintain the upward momentum, a move lower could potentially unfold.

If this scenario was to occur the target for today is 1.1253, being the pair’s pivot point of today.

GBPUSD

The intraday technical outlook

GBPUSD has bounced off the top of the newly created uptrend channel.

GBPUSD needs to hold above 1.4326 level, being the intraday Pivot Point if the price action is to continue its upward move.

The initial upside target is 1.4496, being the 2nd intermediate pivot resistance of today. Should this target be reached, the extend to 1.4530, which is the Daily Average True Range (ATR) upside projection of today, could take place next.

If GBPUSD fails to maintain the upward momentum, a reversal and trading lower could potentially unfold.

If this scenario was to occur, the target for today will be 1.4248, which is pair’s 1st pivot support level.

USDJPY

The intraday technical outlook

USDJPY plummeted lower as the US dollar is weakening.

USDJPY needs to hold below 113.03 level, being the intraday Pivot Point in order to continue the downtrend scenario.

The initial downside target is 111.83, being the 2nd pivot support. Should this level be reached, a further extension towards 111.60, which is the Daily Average True Range (ATR) downside projection of today, could take place next.

If USDJPY fails to maintain the downward momentum, a retracement higher could potentially unfold.

If this scenario was to occur the target for today is 113.02, which is the pair’s pivot point of today.

USDCHF

The intraday technical outlook

USDCHF is dropped lower on the dovish speech of Janet Yellen made yesterday.

USDCHF needs to hold below 0.9693 line being the intraday Pivot Point if the price action is to continue its downward move.

The initial downside target is 0.9600, being the pair’s next key level together with the Daily Average True Range (ATR) downside projection of today. Should that level be reached, the pair could extend trading towards 0.9554, which is the 3rd intermediate pivot support of today.

If USDCHF fails to maintain downward momentum, a reversal higher could potentially unfold.

If this scenario was to occur the initial upside target for today will be 0.9700.

USDCAD

The intraday technical outlook

USDCAD is testing the bottom of the downtrend channel this morning.

USDCAD needs to hold below 1.3112 level being the intraday Pivot Point, if the price action is to continue its downward move.

The initial downside aim is 1.2935, being the pair’s Daily Average True Range (ATR) downside projection of today. After the target is reached, the pair could extend trading towards 1.2895, which is 3rd intermediate pivot support of today.

If USDCAD fails to maintain the downward momentum, a reversal and returning to trade higher could potentially unfold.

If this scenario was to occur the target for today is 1.3112, which is the pair’s pivot point of today.

AUDUSD

The intraday technical outlook

AUDUSD has reached a nine-months high this morning.

AUDUSD needs to hold above 0.7593 level, being the intraday Pivot Point if the price action is to continue the upward move.

The initial upside target for this afternoon will be 0.7715, being the Daily Average True Range upside projection of today. Should this aim be reached successfully, a further stretch towards 0.7770, could follow next.

If AUDUSD fails to maintain the upside momentum, a retracement lower could potentially unfold.

If this scenario was to occur the target is 0.7593, being the pivot point of today.

GOLD

The intraday technical outlook

Gold is trading within the newly created downward trend channel, bouncing off the bottom off it.

Gold needs to hold above 1217.59 level, being the intraday Pivot Point if the price action is to continue the upward move.

The initial upside target is 1225.84, being the 2nd intermediate pivot resistance of today. Should this target be reached, Gold could extend to 1138.00, which is the Daily Average True Range (ATR) upside projection level.

If the metal fails to maintain the upward momentum, a reversal and trading lower could potentially unfold.

If this scenario was to occur, the target for today is 1206.32, which is the commodity’s 2nd pivot support of today.

OIL

The intraday technical outlook

Oil is has bounced off the bottom of the uptrend channel and is trading higher this morning.

The commodity needs to hold above 39.53 level, being the intraday Pivot Point if the price action is to continue the upward move.

The initial upside target is 40.94, being the 2nd pivot resistance of today. Should this target be reached successfully, a move towards 41.35, which is the Daily Average True Range (ATR) upside projection level, could follow next.

If the Oil fails to maintain the upside momentum, a reversal and trading lower could potentially unfold.

If this scenario was to occur the target for today is 39.00, being the commodity’s next key level.

The beginning of the week started with heightened event risk when last Tuesday the Federal Reserve Charwoman, Mrs. Janet Yellen spoke about the Economic Outlook of the US and global economy during a talk given to the Economic Club of New York.

This speech was extremely dovish on the prospect of future interest rate increases when Yellen spoke of the need for a stabilization of foreign economies and markets and the impact of the strong US Dollar.

This week will end how it began with today’s New York session preceded by the monthly Jobs Report which is due to be announced at 1:30 PM London time. The Bureau of Labor Statistics publishes the Jobs Report, which is made up of the Average Hourly Earnings, Unemployment Rate, and Non-Farm Employment Change releases.

Although all three reports are important as together they give a complete picture of the state of the United States employment market, the Non-Farm Payrolls number always receives the lion’s share of the attention.

In a prelude to this afternoon’s data releases, yesterday, the US Department of Labor published the missing piece of the Jobs Report picture when it announced the Unemployment Claims data. Unemployment Claims had been in steady decline since they hit a peak during the time when the great recession ravaged the United States and global economy.

As unemployment claims are published on a weekly basis, there is a lot of data points to consider however the downtrend in this number does support the good overall picture that we have seen in the monthly release of the Jobs Report. The prior week’s announcement was 265K, and the consensus view was that there would be a slight increase in claimants with a rise to 266K. Yesterday’s actual number was 276K.

Back to today’s releases, the markets are expecting the NFP number to be reported at around the 206K level which would be well below the prior month’s 242K. It should be noted that the actual NFP number published has tended to ignore analysts assessments in recent months. Therefore trying to glean anything from such forecasts would seem to have little value.

The Unemployment Rate report has also indicated that there is strength in the US employment market as the amount of those seeking employment has dropped from over 10% back in 2009 to 4.9% that was reported in the March publication. As the rate of unemployment is now so small, it would be tough for the NFP numbers to continually show such strength as fewer and fewer citizens are now looking for work.

Which brings us to the final part of the Jobs Report, which is, of course, the Average Hourly Earnings release. It is to be expected that businesses would begin to increase salaries offered as a means to retain and recruit employees? However, although the Average Hourly Earnings number have only on the occasional month indicated that wages are in fact increasing, there have been other months such as the March publication which were very disappointing.

We end where we started with Janet Yellen at the FOMC and the dual mandate of price stability and a healthy jobs market. The Federal Reserve is dependent on data, therefore, although it would like to see continued strength in the Jobs Report numbers, its will be hoping that the Average Hourly Earnings numbers begin to move in line with the rest of this publication.

Last week ended with highly anticipated Jobs report from the United States. The data, consisting of the Average Hourly Earnings, Unemployment Rate, and Non-Farm Employment Change releases, gives a complete picture of the state of the United States employment market.

The Non-Farm Payroll release, representing a change in the number of employed people during the previous month apart from farming industry, has positively surprised investors with growth to 215.000 working places compared to 206.000 expected. The number has however declined in parallel with the March results of 245.000.

The next component of the Jobs report, presented to the markets by the Average Hourly Earnings, also did well as it showed an upturn of 0.3%. Keeping in mind that the previous month results were -0.1%, and market consensus expected just 0.2% number, this outcome was quite outstanding.

The Unemployment rate announcement, however, calmed down the excitement, revealing a rise to 5.0%, which was the first expansion since the June last year. That could probably explain that the US dollar stayed unaffected to usually such a significant release, with the US dollar index remaining to trade around 94.50 mark, being its five-month low.

Proceeding to this trading week, it began with the news from Australia. Here, the monthly building approvals number has indicated a significant rise to 3.1% from -6.6% of the March outcome. The retail sales dropped to from 0.3% to 0.0% this month. The AUDUSD nevertheless remained trading at its nine-month high.

Later on, at 9:30 am London time the UK monthly Construction PMI data will come into the spotlight. The indicator of the economic health of the construction industry, this time, is expected to increase slightly to 54.3, up from 54.2 of last time. The number higher than forecasted could likely give support to the weakening British Pound.

Today at 19:00 pm London time the FOMC minutes for the last meeting will be published. The release could likely put a further downward pressure on the US currency.

The US Dollar continues to decline as the Federal Reserve’s earlier promises were not matched to the actions. The last FOMC meeting held in March also disappointed investors after it decided to take a significantly more dovish stance than the one it undertook in December.

At the last speech, the Fed chairwoman underlined the caution with changes to the monetary policy being considered. The patient approach pushed the dollar downwards, with its index is now trading below 95.00 level, being its five-month low.

The earlier promised four rate hikes in 2016 are now changed to a mere two, and even these are not guaranteed. As the CME Fed Watch Tool shows, the chances that the Fed will increase interest rates in September are around 40% at the moment.

Furthermore, investors give just 18% a chance to the hawkish actions of the Fed in June and 57% in December. Nevertheless, keeping in mind the last speech of Janet Yellen, the future policy will be much more accommodative to the state of the domestic economy, which is represented by the inflation rate and jobs market. The global circumstances will also continue to be observed.

At the moment, the cheap dollar could actually be of a benefit to the US economy as the local production will be supported. Also, that is the way to keep the cost of the domestic debt at affordable levels, which is imperative to the world’s largest economy.